Development of Agribusiness Enterprises - Asian Productivity ...

(27,213)
(119,378)
Japan U.S.A.
(57,888)
(53,861)
(47,266)
NIEs ASEAN
(45,464)
Figure 3. Direction of Trade Statistics
Source: International Monetary Fund, 1999.
CURRENT PROBLEMS AND FUTURE TASKS
FOR AGRIBUSINESS DEVELOPMENT
Within a quarter of a century, countries in the region have greatly expanded
agricultural production, satisfied food demand among their increasing populations, raised
incomes and successfully supplied the various needs of the people. While promoting
industries that could provide import or export substitution, foreign currency earning through
exports of mainly primary agricultural products contributed to each country’s economic
development. The food processing industry met the needs of developed countries by
transferring production to local sites and by introducing modern technology and management
systems from developed countries. With improved socio-economic standards and changing
lifestyles, domestic demand for processed food grew steadily.
Agriculture in the region became diversified in accordance with conditions within and
outside the region and in response to changes in corporate activities. In addition to
agricultural and livestock production, active changes were induced in agribusiness areas.
That was particularly the case in the food processing industry, and markets grew strongly.
Each country received direct foreign investment and transfers of business management
practices. In addition, they developed their food processing industries and promoted
distribution or the restaurant business. While maintaining the marketing of traditional
foodstuffs, increasing domestic demand for new products was developed.
Current Problems
At present, several crucial problems exist in the region including competition that
escalated with the recent market participation of China and Vietnam. With the start of
investment and production in the food processing sector in those countries, competition
increased between ASEAN and the newcomers. Depending on fluctuations in local currency
exchange rates, local investment conditions, export/import promotions and favorable taxation
(especially the easing of restrictions and the implementation of liberalization), several types
of business investment (from NIEs to ASEAN or from ASEAN to neighboring countries)
started. Some investments were in the form of miscellaneous partnerships such as
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(23,213)
(50,112)